S&P 500 Performance 2025 Highs Met With A Shaky 2026 Start

The party might've hit a temporary lull. After a stellar year where the S&P 500 advanced more than 16%, the first trading session of 2026 closed out a lackluster week for stocks. Investors are now grappling with a divided Federal Reserve and the hangover of 2025's massive gains.

Analyzing S&P 500 Performance 2025 and the 2026 Shift

Friday marked the end of 2026's first week, and it wasn't the opening act many hoped for. The Nasdaq shed 1.5% while the S&P 500 edged 1% lower. According to Reuters, it's unclear what exactly triggered the slide, but minutes from the Federal Reserve's December meeting showed that officials were deeply divided over their recent 25-basis-point rate cut.

The decision was approved on a 9-3 vote, the most significant internal dissent since 2019. This friction suggests that future rate cuts aren't a guaranteed slam dunk, especially as Donald Trump's trade policies and potential tariffs loom over the 2026 economic landscape.

AI Infrastructure Winners vs. SaaS and Retail Laggards

Looking back at the winners of 2025, it's all about the hardware. GE Vernova skyrocketed 98.7% because it builds the natural gas turbines fueling the AI data center boom. Corning wasn't far behind, gaining 84.3% thanks to its specialty glass partnership with Apple and the shift toward fiber optics in AI infrastructure.

However, the software side struggled. Salesforce plummeted 20.8% in 2025 as AI automation threatens seat-based business models. Nike also stumbled 15.8% amid challenges in China. Elliott Hill's recent $1 million stock purchase suggests internal confidence, but the retail giant still has a mountain to climb.